KL still a cheap city for building construction — report

Posted on 13 May 2019

Source: The Edge

Kuala Lumpur continues to be the fourth least expensive city in Asia to build in, according to the “International Construction Costs 2019” report published by Arcadis, the global design & consultancy firm for natural and built assets.

According to the report, Hong Kong is the most expensive city in Asia, followed by Macau and Tokyo, while the top three least expensive cities to build are Bengaluru, New Delhi and Mumbai.

In the same survey report published last year, Kuala Lumpur was also ranked fourth cheapest city.

According to the survey, globally, San Francisco, New York and Hong Kong were the top three most expensive cities in which to build with Kuala Lumpur ranked 97th in the world.

The firm obtained the results from a comparative cost assessment of 100 major cities, which is based on a survey of constructions costs undertaken by Arcadis that covers 20 building types in 4Q17.

Arcadis Malaysia country head Justin Teoh anticipates the construction sector to grow at a slower pace this year compared with 2018 due to revisions around mega infrastructure projects and a general slowdown of global construction projects.

However, he noted that Putrajaya’s allocation of over US$362 million (RM1.5 billion) for affordable housing may stimulate industry growth.

According to the report, the increase in the minimum wage in January 2019 will also impact labor costs in Kuala Lumpur and so the industry should look to digital transformation to increase efficiencies and lower costs.

In terms of the use of digital technology, Arcadis said Malaysia is in the early stages of adoption.

“Kuala Lumpur has a growing economy and a range of civil engineering projects that will be key drivers for the construction industry in 2019. However, there is still political uncertainty on the major infrastructure projects as the cost reviews continue,” added Teoh.

He noted that the price of construction materials was stable in 2018, with the exception of steel, which decreased slightly.

In 2019, Arcadis expects the construction sector to grow by 4.5%, as well as a slight increase of 0.5% in the tender price index.

Overall, Malaysia’s GDP grew by 4.8% in 2018, down from 5.9% the year before. — EdgeProp.my